Pakistan's banking sector continues to show robust growth as total deposits held by scheduled banks witnessed a substantial year-on-year increase of 17.87%, reaching Rs26.11 trillion in August 2023, according to data released by the State Bank of Pakistan (SBP).

In comparison to July 2023, the banking sector's deposits registered a 1.59% month-on-month growth, as they stood at Rs25.7 trillion in July.

Total advances extended by these banks also recorded positive momentum, increasing by 7.82% to reach Rs11.77 trillion compared to Rs10.92 trillion from a year ago.

However, on a monthly basis, advances experienced a marginal dip of 1.03% from its July 2023 level of Rs11.89 trillion.

Advances to deposit ratio (ADR) decline

The Advances to Deposit Ratio (ADR), a key indicator of banking sector health, stood at 45.1%.

However, it witnessed a decrease of 119 basis points on a monthly basis and a more substantial decline of 420 basis points compared to the previous year.

Investments show positive trend

Total investments made by scheduled banks showed a notable increase, reaching Rs22.01 trillion compared to Rs21.46 trillion from the previous month and Rs18.18 trillion from a year ago.

This reflects a month-on-month increase of 2.56% and an impressive year-on-year growth of 21.08%.

The Investment to Deposit Ratio (IDR) saw an 80 basis point increase, reaching 84.32% in August 2023 compared to July, and a substantial 224 basis point increase when compared to the same period last year.

The data suggests that Pakistan's banking sector remains resilient and is attracting increased deposits and investments, reflecting confidence in the stability and growth prospects of the country's financial institutions.